What Your $1 Million Retirement Savings May Be Worth By The Time You Retire At 65

When we discuss retirement savings in Singapore, everyone seems to be focused on reaching the milestone $1 million mark.

Depending on your earning power, you can reach that goal at various ages. So, what if we are fortunate enough to amass $1 million in retirement funds by the time we are aged 35? While that would be impressive, we still need to think about how much this pot of money will be worth by the time we retire at age 65?

Here are various scenarios to figure out how much a $1 million retirement nest egg today could become by the time we retire.

Understanding Rates Of Return

First off, we need to understand the rates of return on our $1 million to realise the amount we’d have when we reach 65. Second, we also need to establish the investment time horizon – if we can save $1 million by 35, we would still have 30 years to compound our returns before needing to use it.

Finally, we need to recognise that keeping that $1 million in our bank accounts today will only earn us a nominal interest return – and our spending power will be chipped away by the rate of inflation. As a result, we need to think about investing our savings.

Three decades is a relatively long time to ride out market cycles and any volatility. Of course, the first port of call would be to establish what exactly your baseline rate of return would be.

Read Also: Making Your First $1 Million In Singapore: How Much You Need To Save Each Month?

Moving Out Of Our Comfort Zone

Many of us may still associate retirement savings with our CPF funds. For this exercise, we can look at what a $1 million nest egg will grow into within the CPF scheme too. As we’ve seen, certain finfluencers have reached $1 million in their CPF accounts before they turned 50.

Our CPF Ordinary Account (OA) pays us a floor rate of 2.5% p.a. – this barely keeps up with inflation. With our Special Account (SA) we know that we can earn a higher floor rate of 4.0% p.a. – and compound our retirement savings much faster.

Earning 2.5% on the $1 million will only leave us with a nest egg of $2,097,567 in 30 years – nearly doubling our initial investment. However, if we can earn the 1.5% more per year, using the CPF SA return of 4.0% compounded over 30 years will give us over $3 million at 65 – more than tripling our initial $1 million, netting us 50% more than what earning 2.5% p.a. would have earned us.

As a point to note, it may be close to impossible to accumulate up to $1 million in our CPF accounts by the time we turn 35, mainly due to contribution limits too. But, the concept of diligently contributing to it over a long time, and earning a relatively decent rate of return, can help us reach the milestone.

Read Also: 1 Million at 65 Using CPF? Here’s The Math Behind The 1M65 Concept

While $1 million is not a trivial amount of money, we also ahve to consider the reality that it may not be enough for our retirement – depending on our lifestyle and requirements, as well as inflation. We should think seriously about investing in assets that can potentially generate an even higher return.

Naturally, investing in global equities or stocks have a consistent track record of generating the highest average returns among all the asset classes.

What can we expect on an annualised basis investing in global stocks? Typically, global stocks have provided an average annualised return of 7-8% over the past century and closer to 10% since 1970. During market crashes, it can be more challenging to think so far into the future, but that’s what it has consistently delivered in the past, even through various crashes such as the 2008 Global Financial Crisis (GFC) and 2020 pandemic-led crash.

We must realise that it is not a figure that we can expect to get every year, as returns from the markets (as we all know) can vary wildly from year to year.

The variations in returns from year to year are extremely dispersed, as the chart below illustrates. That’s highlighted by the fact that only six years over the 97-year period – from 1926-2023 – did US stocks actually deliver returns near the average.

S&P 500 Index annual returns, 1926-2023

Source: Dimensional Fund Advisors

So, based on that, where would our $1 million be if we looked at the average 8% return over 30 years? That would give us a grand total of just over $10 million – there’s that compounding in action.

If we moved further up the returns curve and looked at an average 10% return over 30 years, our total at age 65 would be $17,449,402. That’s over $7 million more just for an extra 2% in annualised returns per year.

Recognising The Impact Of Inflation On Returns

Those are all great sums of money but we need to remember the erosion to our portfolios that is caused by inflation.

Inflation directly impacts our purchasing power, i.e. our money today is going to be worth a lot less in say 20-30 years’ time. So, when we look at our retirement funds, we should also take into account inflation and look at the inflation-adjusted (also known as the “real) rate of return.

In Singapore, the latest inflation reading for March 2025 showed that core prices rose just 0.6% year-on-year. However, on average, core inflation came in at 2.7% year-on-year for the whole of 2024, and it was 4.2% for the whole of 2023.

While inflation has shrunk since spiking in the aftermath of the pandemic, the near-future looks unpredictable with trade tariffs, simmering geopolitical tensions and rising protectionism. This is a long-winded way of saying, let’s assume a long-term average inflation rate of 3% p.a. This means we can take around 3% off the annualised return we derive from our retirement funds each year.

In the Credit Suisse Global Investment Returns Yearbook 2023, the investment firm found that over the last 123 years, the annualised real return of global equities was 5.0%, insinuating a long-term inflation rate of around 3% given global stocks’ long-term average annualised (nominal) return of 8%.

Various Growth Scenarios For $1 Million Over 30 Years (Assuming 3% Annual Inflation)

Source: Author calculations, investor.gov

As shown, our purchasing power in 2055 dollars is going to be significantly crimped by the effects of inflation. The reality of this has been borne out by the data too.

If we don’t earn a return on our nest egg, our retirement savings account will be worth less than half of its value today.

Read Also: Retirement Planning In Singapore: How Much Do I Need To Save And Invest To Retire At 55?

Making Our Money Grow Efficiently

Overall, just putting our $1 million in retirement funds into the CPF SA may seem like a great idea initially but the reality is that, in inflation-adjusted terms, we won’t be able to grow that amount by very much over the next three decades.

Of course, investing into stocks involves taking on an element of investing risk. However, even if we could achieve an 8% annualised return over 30 years, we’d still be able to meaningfully grow our retirement portfolio and utilise the long investment horizon we have to compound our returns.

By looking at the various outcomes of investing our $1 million over 30 years, we can better understand the rates of return we need to obtain to ensure we can retire in line with our desired lifestyle.

One way to help us grow our money is to invest with Endowus, an independent fee-only robo-adviser that provides personalised investment portfolios based on our risk profile and preferences. When we invest with Endowus, we can also rest assured that they actively curate a list of low-cost global portfolios that can give us diverse exposure to global equities and fixed income.

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